Company Update

28 Februari 2024

Fixed Income Report February 28, 2024

Global Market Updates
• Wall Street equities showed mixed performance on Feb 27, with the DJI fell by -0.25%, S&P 500 inched up by +0.17%, while Nasdaq closed up by +0.37%.
• Stock indexes ended with varied results. Strong earnings are bolstering stocks, with Q4 earnings for reporting S&P 500 companies up +7.7% YoY, surpassing the pre-earnings season estimate of +1.2% and representing the highest beat rate since Q4 2021. Meanwhile, hawkish Fed comments lifted T-note yields, weighing on stocks.
• US Treasury 10-yr yields rose by +3.0 bps to 4.31% followed by 2-yr yields up by +1.0 bps at 4.70% on Tuesday. UST yields rose Tuesday on weak durable goods orders and a decline in consumer confidence.
• US January capital goods new orders excluding defense and aircraft parts, a proxy for capital spending, increased by 0.1% MoM, meeting expectations.
• US Dec S&P CoreLogic composite-20 home price index rose 6.13% YoY, beating expectations of 6.05% and marking the largest increase in 13 months.
• The Conference Board's US Consumer Confidence Index for February unexpectedly dropped by 4.2 points to 106.7, below expectations of a rise to 115.0.
• Global bond yields were mostly up on Tuesday; The German bund 10-yr yield rose by +2.4 bps to 2.46%, and the UK gilt 10-yr yield surged by +3.4 bps to 4.19%. The Japanese JGB 10-yr yield rose by +0.70 bps to 0.69%.

Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Tuesday (Feb 27, 2024), with the 10-yr benchmark yield rose +0.55 bps to 6.56%.
• The IDR closed weaker against the USD (USD/IDR rose by +0.06% to 15,640). Over the past three days, the Rupiah has declined as market sentiments are now focused on the continued surge in government debt.
• Meanwhile, in January 2024, Indonesia's government debt reached IDR8,253tn, equivalent to 38.75% of GDP. The majority of this debt, 71.60%, was from domestic sources, with Government Securities (SBN) accounting for 88.19% of the total debt.
• The SVBI auction on Tuesday resulted in a total awarded bid of USD488mn out of a USD518mn bid. However, the bidding rates showed a narrower range compared to the previous auction, where USD652mn was awarded from a USD662mn bid.

Market Forecast
• Given the recent developments that unfolded within the global and domestic markets, we expect the 10-yr Indo GB yield to move within the range of 6.50-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0099, FR00101, FR0075, FR0083, FR0076.

Disclaimer On

FR81 FR99 FR101 FR75 FR83 FR76

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